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Why is the development of agricultural input markets sluggish in Mozambique?
Emílio Tostão
October 2007
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Abstract
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One issue that has long troubled development economist is how to make agricultural markets work better for the poor in less developed countries such as Mozambique. Recently, seed vouchers have been used to distribute seed during emergencies, but some worry that seed emergency programs are setting up a parallel distribution channel that crowds out private investment in the commercial seed sector. This study determines smallholder’s probability of buying maize seed in markets with both emergency and commercial seed. Results show that smallholder’s probability of purchasing maize seed remains very low, especially in north (0.12-0.22) and central Mozambique (0.19-0.38). Results also show that producers who receive emergency seed are relatively less likely to buy seed. These results are consistent with the view that continued distribution of emergency seed may prevent development of seed markets in emerging economies. Based on these results, several recommendations are offered to policy makers.
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